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One of my favorite summer memories, my brother and I run on the suburban Phoenix Street during the monsoon. After dark, it rains and the wind blows violently. When you reach the vast grounds of the schoolyard, you spin around like Dorothy, shake it off, get soaked, muddy, laugh and fall to the ground.
Like many lives at the time, we took the monsoon rain for granted. They come the most each year, with a long-term average of 5.37 inches across Arizona between June and September, bringing a moment of sweet relief from the heat, leaving the sweet and earthy scent of desert rain. It was.
Their arrival is not a matter of course this summer.In my home state and the western United States, so far summer has arrived Record heat, drought, wildfire.. Forecasters cannot say whether it will rain to provide rest, but if the past few years are any sign, they will not. In 2020, Arizona experienced the driest monsoon season on record. This is also known simply as a large amount of hot air, but the average rainfall across the state is only 1.51 inches.And with Lake meadAt its lowest level, the state is preparing for “painful” water restrictions.
Water scarcity becomes a global crisis and only worsens as the planet continues to heat up.
Of course, water concerns aren’t limited to the western United States.Water shortage Global crisis, Only worse as the planet keeps getting hot. No matter how important water is to business and to life itself, the risks associated with lack of water are often overlooked by investors. carbon..
But that is changing. California Give investors a reason to worry. Just a few weeks ago, Barclays analysts identified water scarcity as the “most important environmental issue” for the world’s consumer staple food sector, including food and beverages, household products and sanitary products. In fact, analysts estimate that the average effect of EBITDA on water is three times the effect of carbon in this sector.
This is mainly due to its reliance on agriculture. Agriculture consumes much more water and is swallowed. About 70% worldwide And in vain About 60 percent Its mainly through inefficient applications. Industries, including energy and manufacturing, use 20 percent more, whether given or taken.And demand from agriculture, industry and local governments will only grow — the United Nations 20-30 percent increase by 2050 — As the world’s population Rise to about 9.7 billion..
This increase in demand in the midst of a sharp drop in supply poses problems for businesses. In 2018, CDP analyzed a group of 296 companies that have consistently responded to water data requirements. Of this group, 75% reported exposure to water risks such as operations, regulation, reputation and finance, compared to 70% in 2015. That year, according to data from a broad group of respondents in 783, only 29% of risks set water reduction targets.
Similarly Recent report from Ceres As for climate change efforts from fast food chains, it shows that emission reduction targets are being set, but not so much for water. Both companies recognize the importance of water risks to their supply chains, but are lagging behind in disclosing these risks and working to address them.
Barclays analysts point out that companies can expect to hear more from investors about water risk.Bank 2nd edition 2030 Thematic RoadmapReleased in March, cites water as one of the topics most likely to dominate discussions with investors over the next decade. In fact, analyzing company records over time, analysts have already seen an increase in conversations about water, including both extreme weather and clean water and sanitation, doubling in the last 15 years, from 2019 to 2020. It says it surged 43% over the year.
The cost of laziness is high given the amount required by the water company and its supply chain. Barclays has estimated a $ 200 billion risk in the consumer goods sector alone, compared to aggressive management, which costs an estimated $ 11 billion.
Both Barclays and CDP list L’Oréal as a leader in reducing water waste. The French cosmetics manufacturer operates three “dry factories” in Spain, Russia and Italy, which purify and reuse all the water used in industrial processes such as cleaning and cooling onsite. .. The company also plans to deploy the system elsewhere.
In some cases, regulations and price increases require companies to take action.
rate of up
Water prices are rising around the world. Chennai, India, reported that private companies are paying up to 30% higher costs for their day-to-day operations when cities run out of water. Meanwhile, according to Barclays, in the United States, the average price of water rose by 60% in 30 metropolises between 2010 and 2019. California water futures have regularly surged 300 percent in recent years.
Following the prolonged drought in the Colorado River basin, which includes parts of all southwestern states and all of Arizona, the Federal Development Agency has called on all states in the basin to reduce water intake. According to Barclays analysts, agricultural water users make up 80% of their usage, and this requirement procures wheat, corn, berries and fresh vegetables from the region, including Conagra Brands, General Mills and JM Smucker. It has a direct impact on food companies. , Kellogg and Kraft Heinz.
Ironically, my hometown Phoenix May be better prepared Due to the fact that it gets most of its supply from sources other than Colorado and that the city has long planned this moment, it is better than the rest of the region facing livelihoods with less water. It is excellent. We are implementing various measures such as recycling almost all waste water and charging water for an additional fee in the summer. This has helped residents reduce their use, primarily by replacing lush lawns with desert landscaping. In 2000, about 80% of Phoenix households had grass. Now it’s only 14 percent.
Still, it may not be enough for a city so far. The fastest growing country For years while sitting at the epicenter of the climate crisis. We cannot help noticing that it is strange for people to bravely ignore the ever-rising temperatures and keep moving there. Also, Portland, OregonIt’s just 115 degrees Celsius, and the city of New York, where I live now, is hellishly hot and sultry, so it may not be a problem in the end.
At least in all of its desert landscaping, Phoenix now has more creosote plants. Cleosoto grows only in the arid regions of North America, the Mojave Desert, Sonoran Desert, and Chihuahuan Desert, and is the source of the rainy odor of its sweet, earthy desert. A magical scent that can be enjoyed by thousands of new Phoenix residents when the monsoon rains.
Water scarcity: increased risk for businesses and investors
https://www.greenbiz.com/article/water-scarcity-growing-risk-companies-and-investors Water scarcity: increased risk for businesses and investors